The Ministry of Finance on Sunday clarified that it was not considering any move to levy charges on online payments made on Unified Payments Interface, or UPI, platforms.
The statement came four days after the Reserve Bank of India floated a discussion paper on levying charges in payment systems, including on Immediate Payment Service, or IMPS, National Electronic Funds Transfer, or NEFT, Real Time Gross Settlement, or RTGS, UPI, and other payment instruments such as debit cards and credit cards, reported The Indian Express.
Banks already levy fees on other systems of payment methods such as IMPS, NEFT and RTGS. But, transactions on UPI are free. As the central bank mentioned UPI in the discussion paper, it led to concerns that there could soon be charges on the payment method.
The central bank had, however, clarified that it was not issuing instructions to levy charges on UPI transactions but was only seeking feedback, according to The Indian Express.
The Reserve Bank of India officials familiar with the discussion paper told The Hindu that the idea was to to help firms providing UPI services recover their operational costs, perhaps by levying a charge as low as one paisa or two paise per transaction.
The finance ministry, however, clarified on Sunday that the cost recovery have to be met through other means.
“UPI is a digital public good with immense convenience for the public and productivity gains for the economy,” the ministry said in a series of tweets.
It added that the Union government had provided financial support the digital payment ecosystem in 2021 and has announced the same assistance this year to “encourage further adoption of digital payments and promotion of payment platforms that are economical and user-friendly”.
UPI is one of the most popular methods for daily digital transactions. According to the National Payments Council of India, the total value of UPI transactions was 10,62,991.76 crore for June this year.